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Depth is the minimal amount of bars where there will not be the second maximum (minimum) Deviation pips higher or lower than the previous one. I.e., ZigZag can always diverge, but it can converge (or completely draw together) more than at the Deviation value only after Depth bars. Backstep is the minimal amount of bars between maximums/minimums.

After the ZigZag has captured the lowest point, it starts to search for the turn point until the rollback down from the maximum value exceeds the parameter. As soon as rollover down exceeds the parameter, the second (in this case, the upper) point is considered for captured, and ZigZag starts to search for the third one (in this case, for the lower one), etc.


I dont understand this bold section too well. Im trying to understand how this indicator works before including it in an expert. Any help on trying to explain how this zigzag works would be great.


Thanks in advance

Are the bold words your own inerpretation, or copied from somewhere else?
I don't know why it says "percentage specified for the price scale". There's no such price scale specified in the paramaters for ZigZag.
I find the explanation confusing. I'll give you mine and see if it's useful.

ZigZag looks at history in ExtDepth size bites and finds the extreme hi and low for those sections. So depth is number of bars you can expect a local extreme to be isolated by.
Backstep is only how far back it will look to allow Deviation to slide the exteme. For example if the low was 1.2000 backstep bars ago, and the deviation is 5 and the current bar closes with a low of 1.2003, then the zig zag low for this region will be marked on the more recent bar, with the older (lower) value. It just allows the near bars to be the same for zig zags purposes, marking it more recently but keeping the actual low. So backstep is just how much slop is allowed in near bar extremes and deviation is how little difference it takes to slop them together. I think of them as 'squelch' type values. I don't think they're as critical to understanding zig zag.

Saying this first part one more time, Depth is how wide a look is made for local extremes.

Zig Zag then goes through and compares those local extremes in a way to find the real extremes. If there was a recent low, it sees if the next extreme is lower (new recent low candidate) or higher (locking in old low, and now looking for extemest high). This results in the zig zag pattern.

The last time through is just a way to get the value for zig zag to be consistent (takes both values and sets them to the zig zag point, whether hi or lo, mostly housekeeping step, not worth worrying about).

Find local extremes. Choose which of these are the real extremes. That's zigzag. Depth determins how 'local' those local extremes are.
Lesser inputs Deviation determines how close to the extreme is 'close enough' to count a bar as being the same local extreme, and backstep determines how recent such a 'close enough' bar must be to be counted that way.

-Matt